Order 2010-5-7

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION 

OFFICE OF THE SECRETARY 

WASHINGTON, D.C. 

Issued by the Department of Transportation 

on the 7th day of May, 2010 

 Served: May 7, 2010 

ORDER TO SHOW CAUSE 

SUMMARY 

By this Order, we tentatively allocate four available slot pairs for daily scheduled combination 

services between the United States and Tokyo’s Haneda Airport, as follows: 1) one slot pair to 

Hawaiian Airlines, Inc. (Hawaiian) for its proposed Honolulu-Haneda service; 2) two slot pairs 

to Delta Air Lines, Inc. (Delta) for its proposed Los Angeles-Haneda and Detroit-Haneda 

services; and 3) one slot pair to American Airlines, Inc. (American) for its proposed New York 

(JFK)-Haneda service. We tentatively decide not to award backup authority in this case. We 

also tentatively award Hawaiian underlying economic authority to engage in its proposed 

services. 

BACKGROUND 

On December 11, 2009, the United States and Japan initialed the text of a Memorandum of 

Understanding (“2009 MOU”), providing for an Open-Skies regime between the two countries. 

The 2009 MOU permits U.S. and Japanese air carriers to provide scheduled combination 

services between the United States and Tokyo’s Haneda Airport when Haneda’s fourth runway 

becomes operational.1

 Initially, only four daily slot pairs will be available to carriers from each 

country to provide these services. The scheduled operations will also be subject to the following 

conditions: (1) U.S. operations at Haneda will be permitted between 2200 and 0700 hours local 

time; (2) departures from Haneda to a point in the 48 contiguous U.S. states are not permitted 

prior to midnight; and (3) extra sections are not permitted. 

 

1 Operational use of the fourth runway is currently scheduled in October 2010. 

In the Matter of 

2010 U.S.-HANEDA COMBINATION 

SERVICES ALLOCATION PROCEEDING

 Docket DOT-OST-2010-0018 
2 

By Order 2010-1-17, issued January 26, 2010, the Department instituted the 2010 U.S.-Haneda 

Combination Services Allocation Proceeding, inviting interested U.S. carriers to apply for 

allocation of the four newly available pairs of slots for U.S.-Haneda scheduled combination 

services.2

 The Order also set forth a procedural schedule and evidentiary requirements for the 

establishment of a record for the Department to make a decision in this case. On February 12, 

2010, following the weather-related closure of the Washington, D.C., offices of the Federal 

Government, including the Department of Transportation, the Department issued a Notice 

amending the original procedural schedule. Pursuant to that revised procedural schedule, 

applications were due February 16, 2010, answers were due March 1, 2010, and replies were due 

March 8, 2010.

SUMMARY OF APPLICATIONS AND RESPONSIVE PLEADINGS 

Six carriers – American, Continental Airlines, Inc. (Continental), Continental Micronesia, Inc. 

(Continental Micronesia),3 Delta, Hawaiian, and United Air Lines, Inc. (United) filed 

applications for the four available slot pairs to provide daily combination services in the 

U.S.-Tokyo (Haneda) market.4 Carriers that requested more than one slot pair were required to 

prioritize their requests in order of precedence, and the requests are outlined in that order 

immediately below. 

American requests two slot pairs for daily service from both New York (JFK) and Los Angeles 

using B777 aircraft. Joint applicants Continental and Continental Micronesia request one slot 

pair for Continental for daily service from Newark using B777 aircraft and one slot pair for 

Continental Micronesia for daily service from Guam using B767 aircraft. Delta requests four 

slot pairs for daily services from Seattle, Detroit, Los Angeles, and Honolulu, and proposes to 

use B747 aircraft for all routes with the exception of Seattle, for which it proposes to use A330 

aircraft. Hawaiian requests two slot pairs and proposes to use both for daily services from 

Honolulu using B767 aircraft. United requests one slot pair for daily service from San Francisco 

using B777 aircraft. 

Answers and replies were filed by all of the applicant carriers. Alaska Airlines, Inc. (Alaska) 

and Horizon Air Industries, Inc. d/b/a Horizon Air (Horizon) filed a consolidated reply to the 

answers of United and Continental. In addition, a number of civic parties filed formal pleadings 

in support of the various applicant carriers. The Port Authority of New York and New Jersey 

filed in support of American’s New York (JFK) proposal and Continental’s Newark proposal; 

the New Jersey Parties filed in support of Continental’s Newark proposal; the Continental Master 

Executive Council of the Air Line Pilots Association filed in support of Continental’s Newark 

proposal and Continental Micronesia’s Guam proposal; the Territory of Guam (the Guam 

Parties) filed in support of Continental Micronesia’s Guam proposal; the Delta Master Executive 

Council of the Air Line Pilots Association filed in support of all four Delta proposals; the Wayne 

County Airport Authority filed in support of Delta’s Detroit proposal; the Port of Seattle filed in 

 

2

 We instituted this proceeding in advance of the effective date of the 2009 MOU to provide U.S. carriers the 

opportunity to fully utilize the new rights when they become available. 

3

 We refer to Continental and Continental Micronesia collectively as the joint applicants, as the carriers combined 

their requests in a joint application. 

4

 See Appendix A, where we summarize the applicants’ proposals in chart form. 
3 

support of Delta’s Seattle proposal; and the San Francisco International Airport filed in support 

of United’s San Francisco proposal. 

POSITION OF THE PARTIES 

American asserts that, in terms of local Origin & Destination (O&D) traffic, its proposed 

gateways of New York and Los Angeles represent the two largest mainland U.S.-Tokyo markets. 

It maintains that its proposals would provide on-line connecting service to Haneda from 17 U.S. 

cities behind New York and 20 U.S. cities behind Los Angeles, as well as from 26 foreign points 

for the two gateways. American states that its on-line connecting services combined with its 

New York and Los Angeles gateways would enable it to offer Haneda service to the top 10 

largest mainland U.S.-Tokyo markets.5

 

In comparing New York JFK with Continental’s Newark Liberty proposal, American claims that 

JFK is the preferred airport for international travel, noting that, based on Commerce Department 

data, Newark attracts just 6.4% of international traffic for New York. 6 American also maintains 

that JFK is significantly better than Newark in on-time performance, stating that in 2009 Newark 

ranked last in that category among 31 “reportable” airports. 

With respect to its Los Angeles proposal, American contends that it would offer more on-line 

connecting opportunities than would Delta, the other applicant for Los Angeles service. 

American also points out that Delta is already by far the dominant U.S. carrier in the Japan 

market with a 52% U.S.-Japan bookings share, as compared to 21.8% for Continental and 18.5% 

for United, and only 7.6% for American.7

In their answers and replies, the competing carriers question American’s ability to flow 

connecting traffic over New York and Los Angeles because American does not operate hubs at 

those gateways. With regard to American’s JFK proposal, Continental maintains that its Newark 

service would provide superior connectivity by offering on-line connections to significantly 

more cities than would American from JFK.8

 Continental also disputes American’s claim that 

JFK is superior to Newark for international service, stating that Continental currently out-carries 

American in the New York/Newark-Tokyo market.9

 Regarding American’s Los Angeles 

proposal, Delta asserts that, by use of its B747 aircraft, it would provide 63% more capacity than 

American.10 Alaska and Horizon support the selection of Los Angeles as a new gateway to 

Haneda and the applications of both American and Delta for Los Angeles-Haneda service. 

Among other things, Alaska and Horizon note that they have comprehensive marketing 

relationships, including frequent flier programs, with both Delta and American, and state that 

they have every intention of maximizing their Seattle and Los Angeles networks to enhance 

connecting opportunities for Delta and American passengers.11 United states that its proposed 

San Francisco service is superior to both American proposals because the San Francisco-Tokyo 

 

5

 American Reply, at 1. 6

 American Answer, at 15. 7

 American Answer, at 5. 8

 Continental/Continental Micronesia Joint Answer, at 10. 9

 Continental/Continental Micronesia Joint Reply, at 6-8. 10 Delta Reply, at 20. 11 Alaska/Horizon Reply, at 2. 
4 

market is underserved as compared to the Los Angeles-Tokyo and New York-Tokyo markets, 

and because United’s proposal offers substantially superior connectivity.12 

Continental and Continental Micronesia assert that their proposed Newark and Guam services, 

respectively, would provide U.S.-Haneda service in two of the four largest overall U.S.-Tokyo 

markets. With respect to Continental’s Newark proposal, the joint applicants state that through 

an extensive hub network at Newark, in addition to providing service to the largest local 

U.S.-Tokyo market in the eastern United States, Continental would also offer convenient on-line 

connections to 76 points throughout the North American and Latin American/Caribbean regions. 

They further state that Continental’s Newark service would also provide effective competition 

for the Tokyo services offered from New York’s JFK airport. The joint applicants allege 

American’s claim of better on-time performance at JFK than Newark is misleading, asserting 

that the existing Newark- Narita flight has a better on-time record than American’s JFK-Narita 

flight. 

The joint applicants state that Continental Micronesia’s Guam-Haneda proposal would serve one 

of the largest U.S.-Tokyo local markets while supporting the Guam and Saipan tourist industries 

and facilitating the proposed U.S. military expansion in Guam.13 They contend that, in addition 

to accommodating a large base of tourists, business travelers, military personnel, and civilian 

contractors, Continental Micronesia’s proposed service would also provide the only connecting 

service for passengers traveling between Haneda and various Pacific islands. The joint 

applicants maintain that only the selection of Continental Micronesia’s proposal would allow 

Guam and Saipan to compete effectively with Hawaii for Japanese tourist traffic. Continental 

and Continental Micronesia also point out that, unlike other applicants, they have committed to 

continuing their U.S.-Narita services and would offer passengers the convenience of Haneda 

service as well as alternative service to and extensive connections at Narita.14 

Competing carriers question the value of Continental’s claimed connections at Newark, noting 

that many of Continental’s proposed connecting cities have minimal Tokyo traffic or better 

connectivity via existing Narita services. American and United state that, with only two daily 

services, Continental has chosen not to have a significant presence in the U.S.-Japan market, 

though it has had ample opportunity to increase its services since 1998.15 United contends that 

the New York-Tokyo market is currently better served than the San Francisco-Tokyo market, 

and claims that, through a combination of its service to the large local San Francisco-Tokyo 

market and its superior connecting service at that gateway, its service would benefit more total 

U.S. passengers than Continental’s. 

With respect to Continental Micronesia, the competing applicants contend that its Guam 

proposal does not warrant an award of valuable Haneda slots because the Guam-Tokyo market is 

already well-served and consists almost entirely of Japan-originating leisure traffic. They further 

contend that connecting service opportunities at Guam would be severely limited. The majority 

 

12United Answer, at 22-24. 13 We note that in their answer and reply, the joint applicants at times characterize Continental Micronesia’s 

proposed service as Guam/Saipan-Haneda. We are considering only the potential benefits of the Guam-Haneda 

direct service proposal that the joint applicants applied for in this proceeding. 14 Continental/Continental Micronesia Joint Answer, at 2. 15 American Reply, at 11; United Reply, at 27. 
5 

of the competing carriers also assert that Continental Micronesia could provide its proposed 

service by operating charter flights and does not need an award of slots.16 Hawaiian asserts that 

its Honolulu proposal should be given priority over Continental Micronesia, arguing that its 

service would bring more economic benefits to the United States. Hawaiian further asserts that, 

while Hawaiian currently operates no Honolulu-Tokyo or U.S.-Japan services, Continental 

Micronesia already provides three daily Guam-Tokyo flights.17 

Delta states that each of its four proposed gateways would provide significant service benefits 

and promote effective competition while injecting the greatest amount of capacity into the 

constrained Haneda market. With respect to its Seattle proposal, Delta asserts that it would serve 

a large local market from a West Coast hub gateway and, through the combination of its own 

services and its partnership with Alaska, one-stop Haneda service for 55 U.S. cities. In concert 

with Seattle, Delta states that its Detroit proposal would provide comprehensive network 

coverage of the United States and offer one-stop connecting Haneda service for 106 U.S. cities. 

Delta claims that Detroit should be selected as an eastern gateway to Haneda over Continental at 

Newark and American at JFK because Delta would serve substantially more cities over Detroit 

than those proposed by Continental and American.18 

Delta states that it would maximize service and competitive benefits in its Los Angeles proposal, 

while also providing significant capacity to the largest mainland U.S.-Tokyo market through 

utilization of B747 aircraft. Delta also asserts that through its substantial network at Los Angeles 

and its partnership with Alaska, it would provide one-stop connecting Haneda service for 18 U.S. 

cities. Delta states that it would also use B747 aircraft for its proposed Honolulu-Haneda service 

to maximize service benefits and enhance U.S.-flag competition with incumbent Japanese 

carriers that are already serving the Honolulu-Haneda market on a charter basis. 

Delta takes the position that the proposed immunized alliances between American and Japan 

Airlines, Inc. (JAL) in the oneworld alliance, and United/Continental and All Nippon Airways 

Co., Ltd. (ANA) in the Star alliance, are significant to the disposition of this case because 

American, Continental, and United will all have access to Haneda through their metal-neutral 

joint ventures with their Japanese alliance partners. 

The competing carriers generally maintain that Delta is already the dominant incumbent U.S. 

carrier in Japan and Asia and should not receive any slot pairs, let alone four. They call attention 

to the extensive U.S.-Tokyo and beyond-Tokyo services operated by Delta at its Narita hub, as 

well as the additional Asia service it provides as a result of its immunized alliance with Korean 

Air Lines, Inc. American and United dispute Delta’s assertion that they should not receive 

awards due to their pending applications for antitrust immunity with their respective alliance 

partners JAL and ANA, arguing that Delta is already the largest U.S. carrier in Japan and Asia, 

and that awards to American and United would foster competitive balance among the three 

global alliances. American specifically notes that JAL is undergoing reorganization and 

restructuring and will likely emerge as a smaller carrier, operating fewer departures and serving 

 

16 United Reply, at 30, 35; American Answer, at 19. 17 Hawaiian Answer, at 25. 18 Delta Reply, at 16-17. 
6 

fewer destinations.19 The majority of the applicants argue that an award to Delta for its proposed 

Seattle and Detroit services is not warranted because the Seattle and Detroit local Tokyo markets 

represent the smallest local markets that are proposed in this case. Some also question the value 

of Delta’s connections at Los Angeles and Seattle, pointing out that Delta would be relying 

significantly on Alaska- and Horizon-connecting traffic over which it has no control. Alaska and 

Horizon support the selection of Seattle as a new gateway for U.S. carrier service to Japan’s 

Haneda Airport and Delta’s application to provide Seattle-Haneda nonstop service.20 United 

maintains that its San Francisco proposal would provide service to far more U.S.-originating 

Haneda passengers than would each of Delta’s four proposals. 

Hawaiian asserts that, because it is the only applicant in this proceeding that does not currently 

serve the U.S.-Tokyo or U.S.-Japan markets by either direct or code-share service and does not 

have an alliance partner, as the only new entrant applicant its proposal should take precedence 

over all others.21 It argues that the extensive U.S.-Tokyo services currently operated by the other 

applicants and their alliance partners at Narita make it all but impossible for a new entrant carrier 

to institute service at that airport. 

Hawaiian highlights the economic benefits that its service would provide to the Hawaiian 

economy, noting the dominance of the tourism industry, and contends that it would also be ideal 

for business travelers, given Haneda’s proximity to downtown Tokyo. Hawaiian maintains that 

its proposed service would bring over $110 million in new revenue to the United States and 

create nearly 2,500 U.S. jobs. Although the Honolulu-Haneda service would primarily benefit 

Japan-originating traffic, Hawaiian rejects the notion that it should not receive an award in this 

proceeding for that reason, or that it should instead rely on charter operations to provide its 

service. Hawaiian contends, however, that the answer is not to award Skyteam alliance member 

Delta the four slot pairs it has requested because Delta and its code-share partners already control 

35% of U.S.-Tokyo flights. Rather, Hawaiian states that this case presents a unique opportunity 

to introduce a new, independent competitor in the U.S.-Tokyo market. 

Similar to the position taken by Delta, Hawaiian argues that the award of slots in this proceeding 

cannot be separated from the Department’s consideration of the pending Star 

(Continental/United/ANA) and oneworld (American/JAL) applications for antitrust immunity. 

Hawaiian contends that if those applications are granted, competition would no longer exist 

between American and JAL, as well as between Continental, United, and ANA, thereby resulting 

in a reduction in the number of competitors in the U.S.-Japan market.22 

 

The competing carriers argue that Hawaiian should not receive an award for its proposed 

Honolulu service, for essentially the same reasons they argue that Continental Micronesia’s 

Guam proposal should not be awarded. The carriers state that the Honolulu-Tokyo market is 

already well-served by existing Narita services operated by U.S. and Japanese carriers and 

maintain that valuable Haneda slots should not be used to carry traffic that is in large majority 

Japan-originating leisure travelers. They also call attention to the lack of connecting services 

 

19 American Answer, at 8. 20 Alaska/Horizon Reply, at 2. 21 Hawaiian Answer, at 3-4. 22 Hawaiian Reply, at 4-5. 
7 

that would be offered by Hawaiian at Honolulu. Hawaiian’s opponents also contend that, rather 

than being awarded limited Haneda slots, Hawaiian could provide its proposed scheduled service 

at Narita or by operating charter flights at Haneda.23 

United asserts that its San Francisco-Haneda proposal would offer the strongest all-around 

combination of local and connecting service benefits at both ends of the route. It claims that 

because the Western United States accounts for 36% of all Tokyo traffic, and California alone 

accounts for 27% of that traffic, at least one of the slot pairs must be allocated to a West Coast 

gateway.24 United contends that, of the three applicants proposing Haneda service from West 

Coast gateways, only United’s San Francisco proposal would provide service from a gateway 

that is a hub for the applicant carrier.25 

United argues that the focus of this proceeding should be placed on the benefits provided 

specifically to U.S.-originating passengers and asserts that its proposal to serve Haneda from its 

optimally located San Francisco hub would provide service to more of those passengers than 

would American’s Los Angeles service and Delta’s Seattle and Los Angeles services. 

Specifically, United contends that its San Francisco service would offer non-stop service to a 

large local market and connecting roundtrip service to 27 airports behind San Francisco, enabling 

it to offer service to 40% of all U.S.-originating Tokyo passengers.26 

American and Continental assert that United, like Delta, has long enjoyed the benefits of being 

an incumbent carrier in the U.S.-Japan market, as it holds authority to provide unlimited 

U.S.-Japan services as well as services beyond Japan.27 American notes that United also holds 

antitrust immunity with the Korean carrier Asiana Airlines, Inc., giving United Asian hubs at 

both Narita and Seoul. American further notes that United also engages in non-immunized 

code-sharing in U.S.-Asia markets on Star partners Air China, Shanghai Airlines, and Thai 

International, and points out that the Star alliance is unique in having multiple U.S. carrier 

members - US Airways, Inc. and Continental - as well as United. Delta argues that, in terms of 

local O&D traffic, its proposed Los Angeles gateway would generate more than twice as many 

passengers as United’s proposed San Francisco gateway. 

As a final matter, Alaska and Horizon filed a consolidated reply to the answers of Continental 

and United, to the extent that Continental and United oppose: 1) the selection of Seattle as a new 

gateway for U.S. carrier service to Japan’s Haneda Airport and Delta’s application to provide 

Seattle-Haneda nonstop service; and 2) the selection of Los Angeles as a new gateway to Haneda 

and the applications of both American and Delta for Los Angeles-Haneda service. Among other 

things, Alaska and Horizon note that they have comprehensive marketing relationships, 

including frequent flier programs, with both Delta and American, and state that they have every 

 

23 Delta states that it recognizes that Hawaiian would be limited to offering charter service to Haneda if Hawaiian 

does not receive a slot pair in this case. In these circumstances, Delta states that it has no objection to Hawaiian 

receiving one slot pair for Honolulu-Haneda service, with Delta selected as the backup carrier. See Delta Reply, at 

21. 

24 United Answer, at 4. 25 United Answer, at 5. 26 United Reply, at 2. 27 Continental/Continental Micronesia Joint Answer, at 24-25; American Reply, at 8. 
8 

intention of maximizing their Seattle and Los Angeles networks to enhance connecting 

opportunities for Delta and American passengers. 

TENTATIVE DECISION 

We have tentatively decided to allocate the four available slot pairs for daily scheduled services 

between the United States and Tokyo’s Haneda Airport (Haneda), as follows: 1) one slot pair to 

Hawaiian Airlines, Inc. (Hawaiian) for its proposed Honolulu-Haneda service; 2) two slot pairs 

to Delta Air Lines, Inc. (Delta) for its proposed Los Angeles-Haneda and Detroit-Haneda 

services; and 3) one slot pair to American Airlines, Inc. (American) for its proposed New York 

(JFK)-Haneda service. 

As an initial matter, we note that the Haneda opportunities in this proceeding will not be 

available for use until such time as the United States and Japan sign the 2009 MOU and 

Haneda’s fourth runway is available for operations. In reaching our tentative decision, we are 

proceeding on the assumption that the slot pairs will be available for use by U.S. carriers upon 

runway completion.28 

Haneda services have been limited to primarily domestic operations and have been unavailable 

to U.S. carriers for scheduled international operations since 1978. U.S. carriers have been 

limited to operating U.S.-Tokyo scheduled services at Tokyo’s Narita airport. The 2009 MOU 

presents us with a unique opportunity to facilitate the return of more convenient U.S.-Tokyo 

access for the traveling public. 

In past cases, where we have had an opportunity to introduce or re-introduce service to an area 

that has long been unavailable to U.S. carriers, the Department has typically attempted, where 

possible, to satisfy diverse public interest objectives and needs in selecting carrier proposals for 

award of the available rights.29 Similarly, in this proceeding, the ability to allocate slot pairs to 

enable four daily U.S.-Haneda services, allows us to reintroduce convenient U.S.-Tokyo access 

while addressing a variety of important public interest objectives. Specifically, we can introduce 

new competition in the U.S.-Tokyo market, address the need for U.S.-Haneda service in the 

largest mainland U.S.-Tokyo O&D markets, and enhance competition in the U.S.-Tokyo and 

U.S.-Asia markets. In the circumstances presented, we find that our tentative selections would 

provide the most effective access to Haneda, consistent with the public interest. 

We tentatively award one slot pair to Hawaiian, which would achieve the important objective of 

enhancing competition in the U.S.-Tokyo market as a new entrant. Unlike the other applicants in 

this proceeding, Hawaiian currently does not operate any scheduled U.S.-Tokyo or U.S.-Japan 

services. As the provider of one of four new U.S. carrier services at Haneda, Hawaiian’s entry 

into the Japanese market should be a positive development, in terms of offering greater choice to 

travelers as well as increased competition in the U.S.-Japan market. 

 

28 Our tentative findings here are made on each application’s merits, and have not been considered in conjunction 

with, nor have we pre-judged the outcome of, the oneworld (American/JAL) and Star (Continental/United/ANA) 

applications for antitrust immunity pending before the Department. 

29 2007/2008 U.S.-Colombia Combination Frequency Allocation Proceeding, Order 2008-5-27, issued May 21, 

2008. 
9 

We have taken into account Hawaiian’s acknowledgement that the large majority of the 

Honolulu-Tokyo market consists of Japan-originating leisure traffic. However, we tentatively 

find that, in addition to the service and competitive benefits outlined above, Hawaiian’s service 

would benefit the local Hawaiian economy. Tourism is the dominant industry in the local 

economy, and Japan-originating visitors comprise a significant percentage of travelers to Hawaii. 

The Department has previously found benefit to the Hawaiian economy to be an affirmative 

public interest factor worthy of decisional weight in our regulatory proceedings.30 We 

tentatively find such weight fully warranted in light of the facts presented. 

We also took note of the assertions of the other applicants that the Honolulu-Tokyo market is 

sufficiently served by existing services from Narita and that Hawaiian would offer minimal 

connecting opportunities at Honolulu. Given that the Honolulu-Tokyo market represents the 

largest overall U.S.-Tokyo market, we tentatively find that the large local traffic base should 

make Hawaiian’s proposal viable and sustainable while, at the same time, affording travelers in 

this market enhanced service options. In this regard, we tentatively find that Hawaiian’s 

Honolulu proposal merits an award of one slot pair. 

Having addressed the public interest objective of new competitive entry, we now turn to service 

to the west coast, and California in particular, which accounts for a significant volume of 

U.S.-Tokyo traffic, and which should support introduction of Haneda service from a west coast 

gateway. We note that of the seven U.S. mainland proposals in this proceeding, four involve a 

west coast gateway: American from Los Angeles; Delta from Seattle and Los Angeles; and 

United from San Francisco. Having considered the relative merits of these proposals, we 

tentatively favor the selection of Delta’s Los Angeles-Haneda service. We tentatively find that 

Delta’s proposal at Los Angeles would maximize public benefits by providing service in the 

largest west coast and mainland U.S.-Tokyo market, one that is significantly larger than both the 

San Francisco-Tokyo and Seattle-Tokyo markets. We further tentatively find that Delta’s 

proposed service would best fulfill the public interest by accommodating the very large local Los 

Angeles-Tokyo traffic base while also providing a number of connecting opportunities to Tokyo 

traffic from the western United States.31 

Other parties assert that Delta would offer limited connecting services at Los Angeles and argue 

that some of those services would be operated by Alaska and Horizon rather than Delta.32 Delta, 

however, would not be relying exclusively on Alaska and Horizon services.33 As to those 

services that Alaska and Horizon would provide, we note that Delta, Alaska, and Horizon state 

on the record that they have a domestic alliance and comprehensive marketing relationship.34 

Alaska and Horizon assert that they intend to maximize their Los Angeles network to enhance 

connecting opportunities for Delta passengers. Therefore, we tentatively find that, to the extent 

those services augment the large Los Angeles-Tokyo local traffic base, this domestic marketing 

relationship further supports selection of Delta. 

 

30 Expanded Air Services at Hawaii International Airports, Order 99-12-10, issued December 10, 1999. 31 Delta Exhibit, DL-121. 32 Joint Answer of Continental and Continental Micronesia, at 16 and United Reply, at 15-16. 33 Delta Exhibits, DL-126 through DL-129. 34 Delta Reply, at 20 and Consolidated Reply of Alaska and Horizon, at 2. 
10 

Through utilization of B747 aircraft, Delta would inject more capacity into the U.S.-Tokyo 

market than the other west coast services proposed by the applicants. We tentatively find that 

Delta’s significant capacity advantage is particularly compelling at Los Angeles, clearly the 

largest Tokyo traffic generator of the proposed west coast gateways to Haneda. Although 

American utilizes Los Angeles as a “focus” airport, and would have the additional connecting 

traffic of Alaska and Horizon, Delta’s Los Angeles proposal would inject 63% more capacity 

into the U.S.-Tokyo market than American’s Los Angeles proposal with its B777 aircraft, and 

50% more than United’s San Francisco proposal with its B777 aircraft. Thus, Delta’s proposed 

Los Angeles-Haneda service would provide passengers the largest capacity in this large market 

to offer a practical alternative service option to the existing Narita services available from Los 

Angeles. 

 

Having selected a new-entrant carrier and additional service at Honolulu and provided the largest 

local mainland U.S.-Tokyo O&D market with Haneda service at Los Angeles, we tentatively 

find that there is a need to provide central and eastern U.S. passengers with access to Tokyo’s 

downtown airport. Detroit has proven for decades to be a strong hub for Japan and Asia services, 

and is well-situated geographically to maximize connecting services.35 The broad catchment 

area, in combination with traffic from the local Detroit-Tokyo O&D market, should further 

provide a substantial traffic base to support Delta’s proposed Detroit-Haneda service. The local 

Midwestern economic ties to Japan – both Michigan and Ohio have extensive industrial 

relationships with Japanese companies – provide additional economic reasons to select Delta’s 

Detroit-Haneda proposal.36 While the other applicants in the proceeding cite their connecting 

service advantages, we tentatively find on balance that Delta’s Detroit-Haneda proposal 

represents the best overall combination of geographic breadth of catchment area with limited 

circuity of routing. 

We have considered carrier concerns that Delta’s Detroit proposal does not warrant selection 

because the Detroit-Tokyo local O&D market is the smallest proposed in this proceeding. In this 

regard, however, we tentatively find that selection of Delta’s hub gateway at Detroit would 

further the goals of this proceeding. Through its substantial hub presence and route network at 

Detroit, we tentatively find that Delta would offer important service and competition benefits by 

providing connecting services at Detroit to the largest behind-gateway catchment area in this 

proceeding.37 Delta’s proposed use of B747 aircraft for its Detroit service would also maximize 

use of its hub gateway in serving Haneda, enabling it to accommodate traffic from both the 

Detroit-Tokyo local market and its catchment area. 

We tentatively find that, with the final slot pair that is available in this proceeding, the public 

interest favors meeting the need for Haneda service in the second largest overall mainland 

U.S.-Tokyo O&D market – New York. We have two proposals before us: American’s proposed 

service from New York (JFK) and Continental’s proposed service from Newark Liberty. Having 

weighed each carefully, we see that each presents certain positive elements. While we find merit 

 

35 Delta Application, at 4 and Delta Reply, at 2 36 Reply of Wayne County Airport Authority, at 4. 37 Delta Exhibit, DL-112. 
11 

in both proposals, we tentatively find that the selection of American, which would provide 

enhanced alliance competition, would provide the greater public benefits.38

As previously noted, Continental (along with United) is a member of the Star alliance. Delta is a 

member of Skyteam. In the overall U.S.-Asia market, the Star and Skyteam alliances currently 

hold significant positions. Thus, an award of Haneda rights to American here should enhance 

alliance competition by improving the competitive posture of American and oneworld in the 

U.S.-Asia market as compared to the Skyteam and Star alliances. An award to American would 

also benefit alliance competition in the U.S.-Japan market, where members of the other alliances 

are significant participants. For example, selection of American’s New York proposal provides 

the benefit of head-to-head competition with the Narita services offered at JFK by Skyteam 

member Delta and Star member ANA. 

In light of the circumstances presented, and taking into account our other proposed selections 

and the public interest benefits, we find that selection of American would represent the better use 

of this last remaining Haneda slot opportunity. 

We tentatively conclude that the four selected gateways for U.S.-Haneda services, and the 

carriers selected at each such gateway to provide those services, will make effective use of the 

limited U.S.-Haneda opportunities available to U.S. carriers and widen U.S.-Haneda access, 

consistent with our goal here of addressing a variety of public interest objectives. On balance, 

we find that the public benefits that would be achieved by our tentative selections outweigh the 

benefits of the proposals we were not able to select. 

For the reasons outlined above in our discussion of Delta’s Los Angeles proposal, we tentatively 

find that selection of Delta at Los Angeles would address greater service needs than selection of 

Delta’s Seattle proposal, which we find far less compelling than Los Angeles in light of the 

strong Los Angeles local market, or United’s San Francisco proposal. While United would offer 

more behind-gateway connectivity at San Francisco than would Delta at Los Angeles, we 

tentatively conclude that Delta’s proposed Los Angeles gateway service would offer superior 

public benefits than that proposed by United, given the far greater injection of capacity into the 

overall U.S.-Tokyo market that Delta would provide and its ability to accommodate traffic in the 

largest mainland U.S.-Tokyo O&D market. 

We tentatively did not select Continental Micronesia’s Guam proposal, although we recognize 

that it would provide service in the second largest U.S.-Tokyo market and result in potential 

economic benefit to Guam. We tentatively find that the benefits of injecting Hawaiian’s new 

entrant competition at Honolulu outweigh the benefits of Continental Micronesia’s service 

proposal. We further believe that our other tentative selections would result in a degree of 

competitive and service benefits that are superior to the benefits that would likely result if we 

selected Continental Micronesia’s additional Guam-Tokyo service for an award in place of one 

of the mainland U.S. gateway proposals we tentatively selected. 

Against this background, having only four slot pairs to distribute, we recognize that the proposals 

that were not selected would generate benefits, but we tentatively conclude that those benefits do 

 

38 2005/2006 U.S.-China Air Services Case and Designations, Order 2005-2-14, issued February 22, 2005. 
12 

not outweigh the competitive and service benefits that we anticipate from our tentative 

selections. 

BACKUP AWARD 

We have tentatively decided not to award backup authority in this case. Our awards here are 

directly tied to the diverse public interest concerns needing to be addressed in the circumstances 

presented, taking into account the relative merits of the specific proposals before us in terms of 

addressing those concerns. Against this background, should any of the selected carriers not 

begin its proposed services, we tentatively find that the public interest would be best served by 

allowing us to award any unused rights on the basis of a fresh record. 

ECONOMIC AUTHORITY 

Each of the tentatively selected carriers has been found to be a citizen of the United States, and 

fit, and willing, and able to provide scheduled foreign air transportation of persons, property, and 

mail as a certificated air carrier under section 41102 of Title 49 U.S.C.39 40 We propose to grant 

Hawaiian exemption authority for a period of two years, subject to renewal, and to make this 

authority effective immediately upon issuance of a final order in this proceeding. We note that 

Delta and American currently hold certificate authority to provide their proposed services.41 

We will impose a startup condition for each award. We will require the carriers to institute their 

proposed services within 90 days of October 31, 2010, the date on which the IATA 2010 winter 

season begins.42 In addition, we propose that the slot pairs allocated in this proceeding be 

subject to a 90-day dormancy condition, wherein any slots not utilized for a period of 90 days 

(once inaugurated) would be deemed dormant and revert to the Department.

ACCORDINGLY, 

1. We tentatively grant Hawaiian Airlines, Inc. exemption authority to engage in scheduled 

foreign air transportation of persons, property, and mail between Honolulu, Hawaii, and Tokyo, 

Japan, and allocate to it one slot pair to provide its proposed operations; 

2. We tentatively allocate Delta Air Lines, Inc. two slot pairs for its proposed Los AngelesHaneda and Detroit-Haneda services, respectively; 

 

39 See Orders 2007-7-3 (Hawaiian), 2009-1-8 (Delta), and 2007-4-2 (American). 40 We further find that our awards in this proceeding will result in a near term increase of annual fuel consumption in 

excess of ten million gallons. As a result, our action constitutes a “major regulatory action” under the Energy Policy 

and Conservation Act of 1975, as defined by section 313.4(a)(1) of the Department’s regulations. We find, however, 

that the service provided under the authority granted and resulting public benefits outweigh any adverse effects that 

may be caused by the increased fuel consumption. 

41 See Order 2009-1-8 (Delta) and Order 98-5-16 (American). 42 We are aware that the timing of the Haneda runway completion and the date on which the 2009 MOU is signed 

are factors that could have an impact on startup of Haneda services. We will entertain requests for modified startup 

dates in the event that those factors delay the ability of a carrier to institute its proposed services in the time period 

provided. 
13 

3. We tentatively allocate American Airlines, Inc. one slot pair for its proposed New York 

(JFK)-Haneda service; 

4. To the extent not granted, we tentatively deny the remaining applications in this proceeding; 

5. We direct any interested parties having objections to our tentative findings and conclusions 

set forth in this order and in ordering paragraphs 1 through 4 above, to file their objections, in the 

above-captioned docket, with the Department’s Docket Section, U.S. Department of 

Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 

New Jersey Avenue, S.E., Washington, D.C., 20590, no later than ten (10) calendar days from 

the date of service of this order; answers thereto shall be filed no later than seven (7) calendar 

days thereafter;43

6. If timely and properly supported objections are filed, we will afford full consideration to the 

matters or issues raised by the objections before we take further action;44 if no objections are 

filed, we will deem all further procedural steps to be waived and will proceed to enter a final 

order awarding the authority proposed in this order; and 

7. We will serve this order on the parties to the captioned docket of the order, the Japanese 

Ambassador to the United States in Washington, DC, the Federal Aviation Administration, and 

the U.S. Department of State (Office of Aviation Negotiations). 

By: 

Susan L. Kurland 

Assistant Secretary for Aviation 

and International Affairs 

(SEAL) 

An electronic version of this document is available on the World Wide Web at: 

http://www.regulations.gov

 

43 The original filing should be on 81⁄2" x 11" white paper using dark ink and be unbound without tabs, which will 

expedite use of our docket imaging system. In the alternative, filers are encouraged to use the electronic filing 

submission capability available through the Dockets/FDMS Internet site (http://www.regulations.gov) by following 

the instructions at the web site. 

44 As we are providing for the filing of objections to this tentative decision, we will not entertain petitions for 

reconsideration of this order. 
Appendix A 

 

1

 Where applicants have submitted multiple proposals, they are listed here in the priority-ranking as indicated by the 

applicants. 

2

 Continental states that it may use B787 aircraft in the future. 

3

 Hawaiian Airlines states that it intends to operate its proposed services with B767-300 aircraft, but plans to begin 

receiving new Airbus A330 aircraft this spring and summer. Hawaiian anticipates that it will grow its service with 

its newly acquired A330 aircraft in the future. 

4

 Hawaiian Airlines states its B767 aircraft are equipped with 264 Seats (18C and 246Y) but 1 Business Class seat 

and 5 Economy seats will be blocked for crews on all Haneda flights, resulting in 258 total available seats. 

Applicant Proposed Routing1

 Type Aircraft Capacity Slot Pairs 

 

American New York (JFK) – Haneda 

Los Angeles – Haneda 

B777 

B777 

247 Seats – 16F / 37C / 194Y 

247 Seats – 16F / 37C / 194Y 

1 

1 

Continental 

 

Newark - Haneda B7772 285 Seats – 50C / 235Y 1 

Continental Micronesia Guam – Haneda B767 256 Seats – 20C / 236Y 1 

Delta Seattle – Haneda 

Detroit – Haneda 

Los Angeles – Haneda 

Honolulu - Haneda 

A330 

B747 

B747 

B747 

298 Seats – 34C / 264Y 

403 Seats – 65C / 338Y 

403 Seats – 65C / 338Y 

403 Seats – 65C / 338Y 

1 

1 

1 

1 

Hawaiian Honolulu – Haneda B7673 258 Seats – 17C / 241Y4 2 

United San Francisco – Haneda B777 269 Seats – 8F / 40C / 107Y+ / 114Y 1